RIL shares fall 14% in over two months; what is the good level to buy?
Reliance Industries shares have fallen 14.34 percent from Rs 2732 on November 30 to Rs 2340 today. Market cap of the Mukesh Ambani-led conglomerate stood at Rs 15.83 lakh crore today.
- Feb 8, 2023,
- Updated Feb 9, 2023 9:50 AM IST
Shares of Mukesh Ambani-led conglomerate Reliance Industries Ltd (RIL) have lost 14% in over two months, making the recently announced price targets for the large cap stock look distant. RIL shares have fallen 14.34 percent from Rs 2732 on November 30 to Rs 2340 today. With the ongoing correction, Nuvama Wealth's target of Rs 3,205 on the stock after Q3 earnings looks distant. While Nomura India assigned a target of Rs 2,850 on the stock, Jefferies sees it at Rs 3110 after the December quarter earnings.
JPMorgan gave a target of Rs 3,015 and Motilal Oswal Securities expected the stock to hit Rs 2,800 mark in a year.
Check Share Price Live: Reliance Industries
In the current trading session, RIL stock was trading at Rs 2,340 on BSE , up by Rs 34 or 1.48 per cent against the previous close of Rs 2305.90. Shares of RIL have gained after two sessions of fall.
RIL stock has lost 0.7 per cent in one year and lost 8.21 per cent since the beginning of this year. Total 1.20 lakh shares of the firm changed hands amounting to a turnover of Rs 27.91 crore on BSE today. Market cap of the conglomerate stood at Rs 15.83 lakh crore. The share hit an all-time high of Rs 2,855 on April 29, 2022 and a 52-week low of Rs 2,181 on March 8, 2022.
In terms of technicals, the relative strength index (RSI) of RIL stands at 26, signaling it's trading in the oversold territory. Reliance Industries stock has a one-year beta of 1, indicating average volatility during the period. RIL shares are trading higher than the 5-day moving averages but lower than 20-day, 50-day, 100-day and 200-day moving averages.
Abhijeet from Tips2trade said, "Reliance Industries has a strong support at Rs 2,295. A daily close above Rs 2350 on the daily charts could lead to targets of Rs 2,395-2,410 in the near term."
Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said, "The stock has witnessed a decent correction from Rs 2,750 zone to Rs 2,300 levels where it has shown signs of consolidation and indicating a double bottom formation pattern on the daily chart with previous low also made near Rs 2310 level. The RSI has shown signs of a trend reversal turning from the highly oversold zone and signalling a buy. With the bias improving, the pullback can take the stock to its near-term target level of Rs 2450-2470 zone. One can accumulate this stock keeping the stop loss of Rs 2300 for Rs 2450-2470 level."
Om Mehra, Equity Research Analyst, Choice Broking said, "Heavyweight Reliance Industries has experienced a sharp downturn in its share price due to weak global sentiment and by rising inflation worldwide. As we see a larger time frame, the price has been moving in a precise range between Rs 2250-2800 range over the last 2 years. In a defined channel, there were numerous instances of Head and Shoulder and a sharp sell-off took place at that time; nevertheless, the stock has since rebounded from its lows. In addition to action, the 50 DMA has precisely worked well in catching the trend i.e., positive and negative side. The critical level to keep an eye out for is the 20 DMA, which remains at the Rs 2400 zone. Once the price sustains those levels, it would continue its upside trend. Donchian channel, which is to identify bullish and bearish extremes, has been forming a strong base around the Rs 2300 zone indicates short-to-medium term reversal. As the indicators also determine volatility, the share price could test its medium band which remains near to Rs 2550 level. Following the Heikin-Ashi charts to know when to stay in trades while a trend persists and get out when the trend pauses or reverses indicates price may reverse from the oversold zone in coming days. Additionally, in the quarterly reports, net profit for Q3 remained at Rs 15,611 crore, indicating that a decline in the bottom line had been factored in. This resulted from the fluctuation in crude oil prices throughout the world during the October to December period. Considering Reliance's significant weight in benchmark indices, an increase in the stock will also lead to a substantial upward movement in the index. Long-term investors can build up their holdings from the current levels with an eye towards Rs 2550-2700 in the near future."
Abhijeet Bora, DVP Research Analyst at Sharekhan by BNP Paribas said, "Reliance Industries stock price decline is primarily due to 1) volatile O2C segment margin as well as negative impact of windfall tax, 2) absence of telecom tariff hike and investment in 5G and 3) general market volatility given global interest rate hikes. We believe that firm middle distillate cracks, recovery in polymer margins led by China's reopening and a likely removal of SAED on diesel/ATF would support recovery in standalone earnings. Jio earnings momentum to remain strong as we expect improvement in ARPU led by further telecom tariff hikes/5G rollout while store addition/market share gain in organized retail bodes well for growth in retail segment. We expect strong 18%/20% EBITDA/PAT CAGR over FY22-25E. We have Buy on RIL with a SoTP-based PT of Rs. 3,050. Further, value unlocking in digital/retail (with a likely IPO) and potential monetisation of gasification unit are key catalysts."
Aamar Deo Singh, Head Advisory, Angel One said, "Reliance has been one of the key laggards on Nifty50 on the back of earnings downgrades for the company in the last few quarters, with volatility in global energy prices being one of the key drivers. Foreign ownership too, in the stock is at a 5-year low, indicating a tepid response from global investors. Technically, Reliance has very strong support around the Rs 2200-2250 mark, any decisive break below this level, the stock could then head towards the Rs 2000 level. The upside in the short-term appears to be capped around the Rs 2500-2600 zone."
Sunil Damania, Chief investment officer, MarketsMojo said, "Other than the fact that results for the quarter ended December were not as excellent as the market expected, there are no specific reasons why Reliance has taken a beating. I believe that RIL will continue to be a strong story if they accomplish the value unlocking for their new businesses-telecom and retail. There is a good chance that the telecom and retail businesses will go public in the next 12 months, which might provide investors with a value unlocking prospect. So, despite its poor performance, if you are a patient investor, you should keep this stock."
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Shares of Mukesh Ambani-led conglomerate Reliance Industries Ltd (RIL) have lost 14% in over two months, making the recently announced price targets for the large cap stock look distant. RIL shares have fallen 14.34 percent from Rs 2732 on November 30 to Rs 2340 today. With the ongoing correction, Nuvama Wealth's target of Rs 3,205 on the stock after Q3 earnings looks distant. While Nomura India assigned a target of Rs 2,850 on the stock, Jefferies sees it at Rs 3110 after the December quarter earnings.
JPMorgan gave a target of Rs 3,015 and Motilal Oswal Securities expected the stock to hit Rs 2,800 mark in a year.
Check Share Price Live: Reliance Industries
In the current trading session, RIL stock was trading at Rs 2,340 on BSE , up by Rs 34 or 1.48 per cent against the previous close of Rs 2305.90. Shares of RIL have gained after two sessions of fall.
RIL stock has lost 0.7 per cent in one year and lost 8.21 per cent since the beginning of this year. Total 1.20 lakh shares of the firm changed hands amounting to a turnover of Rs 27.91 crore on BSE today. Market cap of the conglomerate stood at Rs 15.83 lakh crore. The share hit an all-time high of Rs 2,855 on April 29, 2022 and a 52-week low of Rs 2,181 on March 8, 2022.
In terms of technicals, the relative strength index (RSI) of RIL stands at 26, signaling it's trading in the oversold territory. Reliance Industries stock has a one-year beta of 1, indicating average volatility during the period. RIL shares are trading higher than the 5-day moving averages but lower than 20-day, 50-day, 100-day and 200-day moving averages.
Abhijeet from Tips2trade said, "Reliance Industries has a strong support at Rs 2,295. A daily close above Rs 2350 on the daily charts could lead to targets of Rs 2,395-2,410 in the near term."
Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said, "The stock has witnessed a decent correction from Rs 2,750 zone to Rs 2,300 levels where it has shown signs of consolidation and indicating a double bottom formation pattern on the daily chart with previous low also made near Rs 2310 level. The RSI has shown signs of a trend reversal turning from the highly oversold zone and signalling a buy. With the bias improving, the pullback can take the stock to its near-term target level of Rs 2450-2470 zone. One can accumulate this stock keeping the stop loss of Rs 2300 for Rs 2450-2470 level."
Om Mehra, Equity Research Analyst, Choice Broking said, "Heavyweight Reliance Industries has experienced a sharp downturn in its share price due to weak global sentiment and by rising inflation worldwide. As we see a larger time frame, the price has been moving in a precise range between Rs 2250-2800 range over the last 2 years. In a defined channel, there were numerous instances of Head and Shoulder and a sharp sell-off took place at that time; nevertheless, the stock has since rebounded from its lows. In addition to action, the 50 DMA has precisely worked well in catching the trend i.e., positive and negative side. The critical level to keep an eye out for is the 20 DMA, which remains at the Rs 2400 zone. Once the price sustains those levels, it would continue its upside trend. Donchian channel, which is to identify bullish and bearish extremes, has been forming a strong base around the Rs 2300 zone indicates short-to-medium term reversal. As the indicators also determine volatility, the share price could test its medium band which remains near to Rs 2550 level. Following the Heikin-Ashi charts to know when to stay in trades while a trend persists and get out when the trend pauses or reverses indicates price may reverse from the oversold zone in coming days. Additionally, in the quarterly reports, net profit for Q3 remained at Rs 15,611 crore, indicating that a decline in the bottom line had been factored in. This resulted from the fluctuation in crude oil prices throughout the world during the October to December period. Considering Reliance's significant weight in benchmark indices, an increase in the stock will also lead to a substantial upward movement in the index. Long-term investors can build up their holdings from the current levels with an eye towards Rs 2550-2700 in the near future."
Abhijeet Bora, DVP Research Analyst at Sharekhan by BNP Paribas said, "Reliance Industries stock price decline is primarily due to 1) volatile O2C segment margin as well as negative impact of windfall tax, 2) absence of telecom tariff hike and investment in 5G and 3) general market volatility given global interest rate hikes. We believe that firm middle distillate cracks, recovery in polymer margins led by China's reopening and a likely removal of SAED on diesel/ATF would support recovery in standalone earnings. Jio earnings momentum to remain strong as we expect improvement in ARPU led by further telecom tariff hikes/5G rollout while store addition/market share gain in organized retail bodes well for growth in retail segment. We expect strong 18%/20% EBITDA/PAT CAGR over FY22-25E. We have Buy on RIL with a SoTP-based PT of Rs. 3,050. Further, value unlocking in digital/retail (with a likely IPO) and potential monetisation of gasification unit are key catalysts."
Aamar Deo Singh, Head Advisory, Angel One said, "Reliance has been one of the key laggards on Nifty50 on the back of earnings downgrades for the company in the last few quarters, with volatility in global energy prices being one of the key drivers. Foreign ownership too, in the stock is at a 5-year low, indicating a tepid response from global investors. Technically, Reliance has very strong support around the Rs 2200-2250 mark, any decisive break below this level, the stock could then head towards the Rs 2000 level. The upside in the short-term appears to be capped around the Rs 2500-2600 zone."
Sunil Damania, Chief investment officer, MarketsMojo said, "Other than the fact that results for the quarter ended December were not as excellent as the market expected, there are no specific reasons why Reliance has taken a beating. I believe that RIL will continue to be a strong story if they accomplish the value unlocking for their new businesses-telecom and retail. There is a good chance that the telecom and retail businesses will go public in the next 12 months, which might provide investors with a value unlocking prospect. So, despite its poor performance, if you are a patient investor, you should keep this stock."
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Also read: This tweet of Zomato founder Deepinder Goyal pushes stock higher by 8%